On June 9, 2022, a divided panel of the United States Court of Appeals for the Eleventh Circuit decided an unpaid intern who participated in a forensic photography training program was not entitled to wages under the Fair Labor Standards Act (FLSA). In a 2-1 opinion, the Eleventh Circuit panel in McKay v. Miami-Dade County agreed that the photographer-trainee was an intern—not an employee—under the FLSA and the county was not obligated to pay her because she was the primary beneficiary of her participation in the program.

Background

Brandi McKay is a college graduate who enrolled in Miami-Dade County’s no-cost Forensic Imaging Preceptorship Program, specifically to avoid the cost and time commitment of pursuing an additional college degree in forensic photography. The program was six months long and required weekend work. The first two weeks of the Program consisted of workbook assignments, followed by two weeks of shadowing county staff photographers. During weeks five through eight, McKay worked in the morgue taking autopsy photos, “sometimes with staff supervision and sometimes without.” McKay left the program about a month before she would have completed it. Before she left, McKay spent the remaining weeks alternating between taking morgue photos under little supervision and completing assignments in the program office.

McKay sued Miami-Dade County, seeking minimum wage and overtime payments under the FLSA, asserting she was   an employee. The county asserted two primary defenses: (1) McKay was an intern under the internship exception established by case law from the Supreme Court of the United States and Eleventh Circuit and (2) she was a volunteer under the volunteer exception for public agencies found in § 203(4)(A) of the FLSA.

Eleventh Circuit’s Majority Opinion

The Eleventh Circuit majority first addressed the interplay between the internship exception which is a court-created exception that can apply to all employers, and the statutory volunteer exception, which is applicable only to public agencies. The court examined the legislative history and relevant case law and concluded that the statutory volunteer exception did not displace the court-created internship exception. In so finding, the court ruled that both the internship and volunteer exceptions are available to public agencies.

The court then determined that McKay’s participation in the program met the statutory volunteer exception under the FLSA. Section 203(e)(4)(A) of the FLSA provides that a person is not an “employee” if the person: volunteers to perform services for a public agency; is not paid wages, but may be paid expenses, reasonable benefits or a nominal fee; and, performs services different from the services the person performs as an employee of the agency. The statute does not define “volunteer,” but the U.S. Department of Labor has defined the term in regulations concerning the volunteer exception, which the Eleventh Circuit decided were entitled to substantial deference. The DOL regulations define a “volunteer” as:

An individual who performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered, is considered to be a volunteer during such hours.

Under that standard, the court ruled that McKay was not a volunteer within the meaning of the statutory exception because she and the county had stipulated that McKay “was not motivated in any part by civic, charitable, or humanitarian reasons.”

Finding the volunteer exception inapplicable, the court addressed the intern exception. Under that exception, an intern learning under an employer is not considered “employed” within the meaning of the FLSA if the intern is the primary beneficiary of the intern-employer relationship. The Eleventh Circuit majority applied the primary beneficiary test, examining the following seven, non-exhaustive factors:

1. “The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, ex- press or implied, suggests that the intern is an employee—and vice versa.”

2. “The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.”

3. “The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.”

4. “The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.”

5. “The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.”

6. “The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.”

7. “The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.”

None of these factors is determinative, and every factor “need not point in the same direction” for the court to decide an intern is not an employee. Furthermore, the court stated that it weighs and balances all circumstances, including those beyond the seven enumerated factors if warranted.

The court found the facts in favor of applying the internship exception with respect to the first two factors. Concerning the third and fourth factors, the majority found the failure to offer academic credit or professional certification or licensure did not disqualify the county from using the internship exception. Instead, the majority emphasized McKay’s substitution of the internship for “another four years of school.” The majority found that the county’s program functioned as a “free six-month vocational school in all but name.” Therefore, the majority concluded that third and fourth factors were essentially inapplicable to the analysis.

Regarding the fifth factor, the majority ruled that the definite, six-month term of the internship weighed in favor of the county, particularly when compared to a four-year degree in that discipline.

Regarding the sixth factor, the majority, citing a previous Eleventh Circuit case, found that while McKay’s work did displace the work of regular employees, “‘there is nothing inherently wrong with an employer’s benefiting from an internship that also plainly benefits the interns.’” Therefore, the majority gave little weight to that factor. Finally, the Eleventh Circuit determined the seventh factor weighed in favor of the county as McKay did not expect a job with the county after her internship.

In a partially dissenting opinion, Judge Adelberto Jordan disagreed with the majority over factors three and four. He also rejected the majority’s application of the seven-factor test and advocated for a more “holistic,” totality of the circumstances test that focuses on the “economic realities” of each particular case.

Key Takeaways

This opinion illustrates that whether a combination leaner/worker is an employee entitled to wages under the FLSA is a highly fact-based determination. Both higher education institutions that sponsor internship programs and companies that provide learning experiences might want to consider focusing their attention on the facts and circumstances of each particular internship position when determining an individual’s employee-status, with the seven factors discussed in the majority opinion as a guide, in addition to other case-specific factors that suggest whether the primary beneficiary is the learner or the company.